Lowe’s Posts a 26% Rise in Profit

Home improvement retailer Lowe’s Cos. on Monday reported a 26% rise in quarterly profit, topping estimates, as sales rose in all product categories.

The retailer also forecast full-year profit above current Wall Street estimates, sending its shares up more than 4%.

“People are continuing to invest in their houses despite rising energy prices,” said Keith Davis, an analyst with Farr, Miller & Washington. He also said Lowe’s managed expenses better in the quarter.

Earnings rose to $649 million, or 81 cents a share, in the fiscal third quarter ended Oct. 28, from $516 million, or 65 cents, a year earlier.

Analysts on average had expected 77 cents a share, according to Reuters Estimates.

Sales rose 17% to $10.6 billion, helped by the response to recent hurricanes in Florida and along the Gulf Coast. Sales at stores open at least a year rose a better-than-expected 6.2%.

Strong-performing categories included outdoor power equipment, plumbing and flooring. Lowe’s market share in appliances as measured in units rose to 15.4% in the period from 14.4% a year earlier, and consumers bought programmable thermostats and insulation to save energy.

“The most significant indicators for our industry point to continued strength in consumer demand,” said Lowe’s Chief Executive Robert Niblock. Existing-home sales and employment bode well for home improvement, and U.S. hurricanes should spur longer-term sales as consumers rebuild, he added.

Lowe’s, which is expanding to bigger U.S. cities and growing faster than larger rival Home Depot Inc., also said its rapid response replenishment initiative, which speeds deliveries of products to stores, helped lower transportation costs.

The company, based in Mooresville, N.C., forecast per-share profit of 77 cents to 80 cents for the fourth quarter and $3.37 to $3.40 for the full year. Analysts had been expecting 79 cents for the fourth quarter and $3.35 for the year, according to Reuters Estimates.

Lowe’s shares gained $2.92 to $64.89; Home Depot shares rose 66 cents to $42.57.